Checklist for Taking Over Parents' Finances: A Guide for Lexington Caregivers
Has your parent in Lexington, KY, asked for help with their finances? Do they find themselves forgetting how to write checks or missing important payments? If so, it may be time to take over.
Even if you have other caregiving responsibilities, financial planning for aging parents can be a huge task. Handling money can be sensitive, putting pressure on you as a steward of large sums.
Not to worry. With a streamlined system, you can smoothly transition financial responsibility without added stress. Read on for a handy checklist for taking over parents' finances.
Consolidate Accounts
Your loved one may have money in several different accounts, such as:
- Checking accounts
- Savings accounts
- Money market accounts
- Brokerage accounts
- Retirement accounts (401(k)s, Roth IRAs, et cetera)
- Certificates of deposit (CDs)
If possible, consolidate their money where you can. For example, if they have investments with multiple brokerages, transfer all of them into a single brokerage firm. You can receive a combined statement of accounts, avoiding the need to sort through multiple packets monthly.
Ask your parent if they have any large amounts of cash around their house. Try to deposit as much as you can into the bank and set aside a bit as an emergency fund.
If your loved one suffers from cognitive impairment or dementia, consolidate and deposit physical cash as soon as possible. They may forget where they stored it or accidentally reveal its location to nefarious parties.
Meet With an Attorney
Getting legal issues squared away is crucial when taking over someone's finances. The last thing you need to deal with, on top of everything else, is a court challenge or questions about your fitness for the role.
Make sure you're a designated power of attorney for your loved one. Meet with a lawyer to fill out and sign all appropriate forms.
Send copies of such agreements to family members and others who care about your parent to ensure that everyone is on the same page.
In addition, ensure that your loved one's living will and estate plans are appropriately updated. Go through elements such as:
- Budgeting for care (assisted living, memory care, etc.)
- Funeral plans
- Medical guidance (life support, et cetera)
- Division of assets
Having an attorney or a notary present will strengthen your case if you ever need to go to court. Remember, if your loved one suffers from cognitive impairment or memory loss, you need to do this while they are of sound mind.
Keep Important Records
A good rule of thumb for maintaining important records is: When in doubt, don't throw it out. Have copies of documents on hand, including:
- Identification (Social Security cards, state IDs)
- Living wills
- Bank statements
- Investment statements
- Mortgage and property tax information, if applicable
Physical and digital documentation are essential in case you lose one or the other. Store physical documents in a secure, locked location, such as a file cabinet or safe that requires a combination or key.
There are a few different options for digitizing records. Place them in a secure location, such as:
- External hard drive
- Thumb drive
- Password-protected cloud storage
Digital documentation presents significant advantages when you need to share records with others. You can simply upload the files to a shared space that only designated users can access at any time.
Open access to individuals, such as other beneficiaries, promotes transparency and fairness. Most importantly, you shouldn't be concerned if you do not have anything to hide.
Factor in the Cost of Senior Care
Depending on the level of care needed, Lexington senior support can get expensive. You want the best for your parent, but you also need to ensure they have funds to cover that level of care.
Visit multiple senior living communities to analyze options based on their preferences. For instance, they may prefer communal living with easy access to other residents, or their own apartment with a studio floor plan.
Consider inflation and other cost increases when evaluating the cost of senior care. With increased assistance for everyday activities, the level of care and overall expense may increase.
Ask each community about how often they raise their prices. Even if it's not set in stone, you can get a good estimate.
Automate Payments
It can be difficult to remember when to pay for your loved one's expenses. Some of the most common recurring costs for seniors include:
- Insurance premiums
- Utilities
- Property taxes
- Mortgage payments
- Cell phone service
- Cable
Review your parents' bank statements to identify recurring vendors on a monthly or quarterly basis. Visit the vendor website or contact them directly to see if you can arrange autopay.
You won't have to worry about whether you missed an important bill or your loved one loses coverage for failing to pay.
Utilize Accounting Software
If your loved one has complex finances, you may need to rely on accounting software or even an external bookkeeper. Accounting software can help you categorize expenses and identify cash flow issues.
Accounting software also allows you to easily pull reports. If an attorney or beneficiary wants more details on certain expenses, you can pull up transactions with the click of a button.
Services such as QuickBooks Online can connect directly to your bank account and import transactions in real-time. It's easier than ever to categorize payments and automate recurring expenses.
Use This Checklist for Taking Over Parents' Finances
You do not have to feel overwhelmed when it comes to managing elder finances. With this checklist for taking over parents' finances, you can navigate every obstacle that you come across.
One component you shouldn't have to worry about? Personal care or memory care. At Preston Greens Senior Living, our goal is to provide your loved one with a personalized, enriching support plan that contributes to an active lifestyle in their golden years.
Is your loved one ready to transition to a thriving new community? Contact us today to learn more about all of the services we offer at our location in Lexington, KY. We can't wait to hear from you!